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Jacky Chun Chi-wai, chairman of China Metal Recycling. His wife was found not guilty in the company's alleged fraud case. Photo: Edward Wong

Judge ends China Metal injunction

A Hong Kong High Court judge has found no evidence of wrongful involvement in the alleged China Metal Recycling fraud by the wife of the firm's chairman.

A Hong Kong High Court judge has found no evidence of wrongful involvement in the alleged China Metal Recycling fraud by the wife of the firm's chairman.

The Hong Kong-listed company's chairman and chief executive Jacky Chun Chi-wai, his wife Lai Wun-yin, a non-executive director, and 11 companies are defendants against the firm's liquidators, which are seeking an injunction against them.

On August 9, Lai and two companies, Healthy World Trading and Gold Dragon International Logistics, asked the judge to drop the liquidators' injunctions against them that had been in force since July 30. The judge, Jason Pow Wing-nin, agreed to their request.

"There was no basis to suggest [Lai] was in fraudulent breach of fiduciary duties. There was no evidence that the defendant knew or participated in the fictitious transactions. The plaintiffs had failed to establish a good case vis-à-vis the defendant. On this ground alone, I should have refused to continue the draconian injunctive orders against her," said Pow.

The lawyer for the liquidators, Douglas Lam, had alleged that Lai was guilty of fraudulent breach of fiduciary duties and conspired with her husband and five companies in fictitious transactions.

The Securities and Futures Commission found China Metal Recycling overstated its financial position in its listing prospectus, and its subsidiary, Central Steel (Macao Commercial Offshore), made fictitious purchases from three major suppliers from 2007 to 2009.

This article appeared in the South China Morning Post print edition as: Judge ends China Metal injunction
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